Spain's "bad bank" rebuffs three investment funds

MADRID – Spain's so-called 'bad bank', Sareb, has rejected overtures from investment funds Cerebrus, Fortress and Centerbridge to enter into its capital because they were asking for advantages over other shareholders, a source with knowledge of the matter said on Saturday.

"They asked for privileges when it came to buying the assets, and Sareb rejected that offer," the source, who spoke on condition of anonymity said. "Sareb has a commitment to treat all shareholders the same."

Sareb declined to comment. None of the three funds could be reached for comment and neither the Bank of Spain nor the Economy Minister could confirm the matter.

Spain set up the bad bank to hive off rotten real estate assets dating from a property crash from lenders' balance sheets as a condition of receiving around 40 billion euros ($54 billion) of European money to bail out ailing banks.

The head of Sareb, Belen Romana, sent a letter to the three funds on Friday declining their entry into the bad bank's capital, but leaving the door open for further talks, Expansion newspaper reported on Saturday.

The funds wanted first choice on buying portfolios of finished buildings and on supplying services to the bad bank, the paper said.

Sareb took on 37 billion euros worth of troubled real estate assets at the end of December from four nationalized banks, including Bankia